Category: Analog Lunacy

There’s a meme currently doing the rounds of Facebook and Twitter, purporting to show that benefit fraud is pretty much too trivial to care about. Here’s the infographic:

It’s pretty obvious what we’re intended to perceive here. Big blue circle on the left, little pink circle on the right, isn’t it obvious that the small one isn’t worth bothering with?

Well, no. There are quite a lot of things wrong with this comparison. Let’s look at a few.

The most obvious is that the big blue circle is the unofficial total of lost tax revenue. It’s there because the official total, in the red circle, isn’t anywhere near as scary (although it’s still bigger than the pink circle). But, on the right, we only have the official figures. The infographic omits it, but there are other, equally unofficial (but equally well-founded) estimates of the value of benefit fraud which greatly exceed the official figures.

To make a meaningful comparison, therefore, we need to disregard the big blue circle on the left and only use the red circle. Anything else is simply not comparing like with like. If we’re sticking with official figures on one side, then we need to stick with official figures on the other, and ignore all the various unofficial estimates.

OK, but the red circle is still a lot bigger than the pink one. But look at what it contains: Tax evasion, tax avoidance and tax uncollected. Those are three very different things. By contrast, the right hand side breaks down excess expenditure into two different circles: overpayment by error and fraud. (We’ll ignore the green circle, as it’s not really relevant to the comparison, save to say that benefits unclaimed are a good thing – it means people are taking responsibility for their own lives rather than expecting the state to provide).

So our comparison still isn’t meaningful. We have multiple categories included in the red circle (£30 billion) and only one in the pink circle (£1.2 billion). We need to find out what part of the red circle is the equivalent of the pink one.

Fortunately, HMRC does actually publish this information. Here’s a pie chart from that PDF:

The document goes on to explain what those different categories mean. You can read the original by following the link, but here’s a brief summary:

Error. This is tax lost due to cock-ups by HMRC. We can ignore this when comparing with benefit fraud, since error is a separate category (the small pale blue circle) on the right.

Failure to take reasonable care. This is the counterpart of error, in this case cock-ups by taxpayers getting their submissions wrong. It is, however, innocent error, caused by carelessness or ignorance rather than malevolence, so it’s still not analogous to benefit fraud. (In this context, too, it should be borne in mind that commercial taxes, such as VAT and Corporation Tax, can be horrendously complex and difficult to calculate accurately, even for professionals).

Non-Payment. This is tax that would have been paid, but wasn’t. Mostly, this is due to companies going bankrupt and not being able to afford to pay their taxes. Again, while regrettable, this is not fraud.

Legal Interpretation. This is a lovely little weasel phrase, used by HMRC to describe a situation where their lawyers and accountants and the taxpayer’s lawyers and accountants disagree on how much should be paid, and the taxpayer wins the argument. Depending on which side you’re on, this may or may not be considered immoral, but it still isn’t illegal.

Avoidance. This is people taking advantage of legal loopholes to minimise their tax liability. As before, there are various opinions as to the morality of this, but its legality is not an issue. So, still not equivalent to benefit fraud.

Criminal Attack. This is tax lost as a result of deliberate criminal activity such as smuggling and VAT fraud. This is clearly illegal.

Evasion. This is tax lost due to deliberate falsification of information supplied to HMRC – lying on a tax return, for example, or hiding money in a Swiss bank account. This, too, is definitely illegal.

Hidden Economy. This is generally undeclared income, such as earnings from “cash in hand” work and moonlighting. This is illegal too, although it’s interesting that HMRC doesn’t consider it to be in the same category as evasion. (To be slightly more precise, HMRC considers that evasion is an act of commission, telling a deliberate lie, whereas the hidden economy is an act of omission, simply keeping quiet and hoping you don’t get asked).

These last three are the only ones that can reasonably be considered equivalent to benefit fraud, not least because they are the only ones which – like benefit fraud – are actually illegal. Even within those, though, they are not the same. Criminal attacks on the tax system are obviously a serious concern, but they have no real equivalent in benefit fraud (and some might argue that the government is the author of its own misfortune in many cases, as high excise rates are precisely one of the things which encourage smuggling and counterfeiting).

The hidden economy, on the other hand, despite being illegal, is something that a lot of people would either not care much about or even tacitly support. Realistically, anyone who has ever paid cash in hand for work done by a tradesman has probably contributed to the hidden economy; many people who buy and sell on eBay or at car boot sales have engaged in it directly. And, of course, many of the people who work in the hidden economy are also those who are likely to be over-claiming benefits, and for the same reason – they are short of money. If we are being invited to withdraw our condemnation of benefit fraudsters, therefore (which is, after all, the point of the infographic meme), then, to be even-handed, we also have to be equally tolerant of those who don’t declare their earnings for the same reasons. I’ll come back to this point later.

That leaves outright tax evasion, therefore, as the only part of this £30 billion tax shortfall which is both equivalent to benefit fraud and indisputably deserving of condemnation. So where does that leave us, in financial terms?

The answer, according to HMRC, is that tax evasion accounts for approximately £4 billion of lost revenue. That’s still more than benefit fraud, of course (just over three times as much, in fact), so it is a much worse loss.

But it isn’t several orders of magnitude bigger, as the infographic misleadingly implies. If £4 billion is worth caring about (and it is), then £1.2 billion, though lesser, is worth caring about too.

In any case, the other implication of the meme, that the government cares more about benefit fraud than it does about tax losses, is completely and utterly false. HMRC spends a lot of time end effort tracking down evaders and tax frauds, and the police put just as much effort into hunting down criminal gangs that scam the state. The idea that the government is blithely unconcerned about various tax crimes, while clamping down hard on people who over-claim a few quid on benefits, is purely an invention of those who seek to discredit those in power. If anyone really thinks that the Chancellor of the Exchequer would prefer to miss out on £30 billion of tax revenue than take any action to recover it, then they’re just plain daft.

Going back to the comments about the hidden economy, though, I do actually have quite a lot of sympathy both with those who over-claim benefits or who under-declare income. And that’s because the tax and benefit systems often seem designed to cause the greatest pain to those who play by the rules. Benefit traps are a classic example – it’s possible for someone to take a job, but be worse off as a result when their benefits are abruptly withdrawn. And income tax often hits low to middle income earners the hardest, as they have lower disposable incomes with which to pay over-inflated housing, fuel and transport costs (all artificially high due to government manipulation) and little in the way of mitigation from benefits. So it isn’t surprising that someone who has just got a job will “forget” to mention that fact when collecting housing benefit, or that someone who can get paid in cash will just pocket the money rather than log it in their accounts. I don’t approve of all forms of benefit fraud or hidden economic activity, but I do find it hard to disapprove of that which is clearly encouraged by the system.

So what’s the solution to the real problem of benefit fraud, the problem that the infographic tries to pretend is insignificant? I think it’s the same as the solution to the problem of most tax avoidance and the hidden economy. We need a simpler, more transparent and easily understood tax and benefit system which never penalises someone for working harder or earning more. But I suspect that isn’t going to appeal to whoever created the infographic.

Are you struggling with debts of over £5k with 2 or more creditors? Reply CALL for a no obligation call from an advisor of STOP.

The sending number was shortcode 60601, in case anyone else gets the same thing.

Normally, all I’d do with SMS spam is report it to O2 and ignore it, but this time I decided to see if I could dig a little deeper and find out who had spammed me. So I replied “CALL” and waited to see what would happen.

It took them three goes to get through to me; the first time their operator hung up almost as soon as I went off-script and the second time I was busy so it just went to voicemail. But that was handy, because – somewhat unexpectedly – the number they called from wasn’t withheld. The calling number was 0161 429 3337. That’s a Manchester number, and a bit of Googling revealed it to belong to Debt Advisory Line Limited, company number 07067381.

There are several websites where you can look up company details, so I took a look at one of them, Company Check. Here’s their page for Debt Advisory Line Limited: http://www.companycheck.co.uk/company/07067381. There’s a lot of information on that page, but the interesting stuff here is found when you click the “Key Financials” tab. These are the current figures:

Cash at Bank: £1,062,206
Total Current Assets: £4,175,819

So far, so good. That’s a lot of positive value there. But wait…

Total Current Liabilities: £5,489,672

That’s nearly five and a half million quid in debt. All of which adds up to:

Net Worth: £-3,297,184

That’s over three million the wrong side of the solvency line.

I don’t know about you, but I find it rather amusing that a company which makes money selling debt advice is itself serious in debt. Maybe they should take some of their own advice. Or maybe not, since they clearly don’t actually know all that much about staying out of debt.

Anyway, a bit more poking around the Company Check page gives a list of directors. Two of them in particular have been directors for a while, Mr Benjamin George Richard Farrar and Mr Mark James Mitchell. Together, these two seem to make a habit of running financial companies, mainly under the banner of their holding organisation Mitchell Farrar Group LLP. And, guess what… the Financials tab shows that to be both seriously in debt and insolvent as well. Oh dear.

So, by the time I got another call from them, I had plenty of interesting information to run by the agent. I asked him how much he was paid for working there. “So so” was his reply. I guess you can’t afford to pay much when you’re that far into the red. I asked him why his employers were sending out spam SMS, in contravention of the law. His answer was that they didn’t send it, it was another company, Axiom, acting on their behalf. Some further investigation later revealed that Axiom are merely the suppliers of bulk SMS software, so that answer is a tad misleading to say the least. Although we can’t really blame the agent for that, since his script clearly doesn’t cover that kind of question and, to give him credit, he was prepared to argue with me for a bit before finally giving in and ending the call. Although, of course, that’s not what he’s supposed to do either, since arguing with me isn’t selling debt advice – it’s just wasting his time and his employer’s money on a fruitless phone call.

I finished off by suggesting to him that, if he was looking for a long-term career then it would probably be a good idea to start job-hunting now. After all, a company which is heavily in debt and can’t meet its liabilities may well cease trading at fairly short notice. And, while I don’t have any sympathy at all for the owners of companies like Debt Advisory Line Ltd, I do have some for their staff who don’t realise what they’ve got into.

Incidentally, if you, or anyone else, are struggling with debt, then the absolute last place you need to go to is a company like Debt Advisory Line Ltd. After all, they’re a business, not a charity. They have to make money somehow (even if they don’t make enough of it). And the only way they can do that is by making money from the people who turn to them for advice – who are already in debt to begin with.

If you need help with debts, then you can get all the advice you need without it costing you a penny. Your local Citizens Advice Bureau is a good place to start, or their online Debt Advice Guide. Other, good sources of impartial and genuinely free advice include Money A&E, the Money Advice Trust’s National Debtline and Christians Against Poverty. Don’t be put off by the name of the latter, it isn’t just for churchgoers or those of a religious bent.

Whatever it is you want or need, there is one thing you should absolutely, never, ever do, and that’s buy something or take advice from a company which sends out unsolicited SMS messages. After all, if they’ll act unethically and illegally when advertising to you, what guarantee do you have that they won’t act unethically and illegally when selling to you?

I got an unsolicited sales call this evening. Since we’re registered with the TPS, that’s illegal. So I decided to report them via the online complaint form.

In the course of filling in the form I noticed that when it reached the section where I had to give the name of the offending caller it was using a bit of “search as you type” Javascript to auto-complete the form with names matching what I’d typed so far. And the company I was complaining about was one of the suggested names.

Apart from the fact that this is a useful piece of code that makes completing the form easier, it also confirms that they’ve been the subject of previous complaints. Otherwise, there would be no reason for them to be in the auto-complete list.

So it occurred to me to go another step further. What if I could see the full list of names used in the auto-complete? Right-click, select ‘view source’, a quick glance through the HTML and yes, there’s the location of the underlying search page. Open it separately in a new browser tab, and it turns out to be a simple text list of all the names. No server-side processing at all, it’s completely client-side and all the data is downloaded by the browser as you complete the form.

In total, there are 440 entries in this list. The names range from well-known, generally reputable companies through charities to obvious scammers and shysters. I’ll leave it to you to decide which category each of them falls into, but I was amused by the fact that the alphabetical listing puts “WE CLAIM U GAIN LTD” next to “WE FIGHT ANY CLAIM”. There would be a certain amount of poetic justice if those two ended up battling each other over a claim brought for breach of the TPS.

Even allowing for the fact that some complaints will be misdirected or spurious, though, this is still an excellent list of companies that probably don’t deserve to get your business. Stick with suppliers who advertise their wares and services legally.

Add that up and you get $375.1 billion. Now, that’s a lot of money, for sure. But, if there are “1 billion hungry people” in the world, then divided between them it would amount to $375.10 per person.

That is not going to feed them for 250 years. Or anywhere near it.

And, incidentally, the top three on that list are also by far and away the world’s biggest philanthropists. Bill Gates has publicly stated his aim to spend all of his wealth combatting disease and malnutrition in the developing world. I think that’s a laudable goal. And it will almost certainly do far more good than if he simply gave it all away to a billion different people.

Opposing injustice is all very well. But making false claims about the wealthy makes you look either stupid or a liar.

I don’t normally go in for the Disgusted of Tunbridge Wells approach, but the answer to this Freedom of Information request very nearly had me heading into Daily Mail territory with my reaction.

The question asked was fairly simple: The inquirer wanted to know how many people are entitled to drive (ie, are not banned from driving) but have 12 or more points on their licence – that is, have more than the number of points which would normally result in an automatic ban. The answer is shown in this table.

Now, I’m not too bothered about the people with 12 points, or numbers a little over that. The law does allow for discretion when it comes to imposing a ban in cases where it would cause “exceptional hardship”. And it’s quite easy to reach 12 points without ever doing anything seriously wrong – a couple of fixed-penalty speeding tickets issued by cameras followed by a single instance of driving without insurance as a result of a genuine oversight in missing the renewal date by a day, for example, would do it. So there are probably quite a lot of people who reach 12 points and can reasonably count themselves unlucky to be banned, as well as a fair number who are deservedly allowed to carry on driving.

But when you get to the higher values – at the bottom end of that table – then the mind does start to boggle a bit. There are people driving around with more than 20 points on their licence. To get that, they’d have to have committed multiple minor offences, or at least one serious one, after reaching the point at which they would normally be banned.

And, right at the end, we discover that there is (or, at least, on the 7th July 2011 there was) someone in the UK in possession of a perfectly valid driving licence with 33 points on it. That’s nearly three times the number which normally results in a ban. It’s 11 speeding tickets, or three convictions for dangerous driving. So the question has to be asked: Just how bad a driver do you have to be to rack up that many points? How much have they paid in fines each time? How big a hardship would it be for them to be banned? And how much does their insurance cost? Whoever it is, they must be getting pretty close to the point at which it would be cheaper to take a taxi every time they want to go somewhere.

So, the News of the World will be no more after this weekend. I can’t say I’ll miss it, although I do feel a little sorry for the staff who will be losing their jobs while the senior executives who allowed the paper’s name to become mud keep theirs.

There is, though, and quite understandably, a lot of gloating going on at the moment. But is this really a victory? I’m not so sure.

In 2006, the Information Commissioner’s Office published a report titled “What Price Privacy Now?“, about the use of illegal methods by private investigators to obtain information for newspapers and other clients. Not all of this is phone hacking, of course (in fact, that’s a fairly small proportion of the total), but the methods used were no less illegal and no less intrusive. In particular, there’s one table which shows the “number of transactions positively identified” as involving illegal and/or intrusive methods and the number of journalists involved, listed by newspaper. If you download the full document, linked above, it’s on page 9. But here’s the list in simple text format:

Publication

Transactions

Journalists

Daily Mail

952

58

Sunday People

802

50

Daily Mirror

681

45

Mail on Sunday

266

33

News of the World

182

19

Sunday Mirror

143

25

Best Magazine

134

20

Evening Standard

130

1

The Observer

103

4

Daily Sport

62

4

Sunday Times

52

7

The People

37

19

Daily Express

36

7

Weekend Magazine (Daily Mail)

30

4

Sunday Express

29

8

The Sun

24

4

Closer Magazine

22

5

Sunday Sport

15

1

Night and Day (Mail on Sunday)

9

2

Sunday Business News

8

1

Daily Record

7

2

Saturday (Express)

7

1

Sunday Mirror Magazine

6

1

Real Magazine

4

1

Woman’s Own

4

2

Daily Mirror Magazine

3

2

Mail in Ireland

3

1

Daily Star

2

4

Marie Claire

2

1

Personal Magazine

1

1

Sunday World

1

1

Yes, the data is now nearly five years old, so it doesn’t include the period covered by the NotW scandal. And it’s quite possible that some of the publications at the top of the list have cleared up their act in the meantime. But that’s not what the media themselves are saying.

This may be the end of the road for the News of the World. But it’s not the end of the road for the story. There will be plenty more twists and turns before it’s all over.

There’s a quite astounding comment attributed to a footballer who has managed to gain an injunction preventing the press reporting his off-field activities. No, not Ryan Giggs, the other one. Well, one of the other ones – it seems that there are plenty of footballers who are gaining injunctions to prevent it being reported that they’re more free-scoring off the pitch than on it.

This particular case is the footballer known as TSE. In the published decision, the judge has this to say:

In a witness statement made by him the man [TSE] states that the information in question has hitherto been private and explains the effect that he says that publication of this information would have if it were published. It would have a devastating effect on his marriage, on his wife and particularly their children. He states that it has become common for footballers whose private lives are exposed by the media to be booed during games and be the subject of cruel chants.

There are a couple of things here that really need to be said. Firstly, however unpleasant it may be to have your indiscretions plastered over the gutter press, the real “devastating effect” on TSE’s marriage is caused by the fact that he’s been having an affair. Call me old-fashioned if you like, but I happen to believe that if you make a promise to be faithful to someone, then you should be. And if you’re not, then you just have to hope your spouse is in the mood to be forgiving. Trying to hush it up through the courts is more likely to make things worse.

Secondly, being on the wrong end of terrace taunts is part and parcel of being a footballer. Harsh? Yes. But realistic, too. And is it really any worse to be on the receiving end of “You’re not secret any more” (allegedly sung at Ryan Giggs yesterday) than “You couldn’t score in a brothel”? (Or, in some cases, suggestions that scoring in a brothel is only too easy). Yes, fans enjoy taking the Australian lager out of players who have been caught with their pants down. Ask Ashley Cole. Or Wayne Rooney. But it blows over. Again, ask Ashley Cole or Wayne Rooney. Prolonging the agony via the courts is only going to make it worse.

I wrote a couple of days ago that I do have some sympathy for Ryan Giggs, given that he does seem to have been at least partly set up and a victim of his own naïveté as much as anything more serious. But that argument doesn’t apply here. TSE isn’t being blackmailed, or the victim of a kiss-and-tell. He and his co-injunction-seeker are two people who willingly and knowingly engaged in an adulterous relationship and now want to hush it up.

Fortunately for TSE, his season is over (unlike Ryan Giggs, who will almost certainly be playing in the Champions League final on Saturday). By the time it all kicks off again in August, the fans will have forgotten. But I doubt if his wife will, and I can’t imagine she’s going to be too pleased at the way things are panning out. I can only hope, for his sake, that she is the forgiving type.

I’m not particularly a Man Utd fan, but I have to admit that they deserved to win the Premier League this year. Of their main rivals, Arsenal still can’t find the bottle to go with their undoubted skills, and Chelsea’s mid-season meltdown was entirely their own fault – and wasn’t helped by boardroom meddling. By contrast, Man U just kept going, kept winning and had the stamina and guts to bounce back when they did encounter a setback. The 19th title is in the bag, and Liverpool are off their perch. So kudos to the Red Devils, and good luck against Barcelona next week.

It’s a pity, therefore, that United’s achievements have been somewhat overshadowed by the football injunction row. Probably the most high profile case is that of a player who I can only identify as “CTB”, who took out an injunction to keep secret his affair with former Big Brother contestant Imogen Thomas.

Now, I don’t know the details of what went on between them, and, to be honest, I don’t particularly want to. I’m not a fan of tabloid style journalism which thrives on celebrity gossip, and I do have a fair amount of sympathy with CTB for wanting to keep his name out of those papers. But there are some things about this case which I do find disturbing.

Reading the details which have been published so far, it seems that Miss Thomas was planning to sell a “kiss and tell” account of the relationship to the press. That much seems to be undisputed, and was the initial trigger for CTB to seek the injunction. But, beyond that, it all gets a little murky. Early reports, from the perspective of Miss Thomas, gave the impression that CTB was a “love rat” deliberately cheating on his wife over a period of several months. But the claims made in the injunction – and, seemingly, accepted by the judge, Mr Justice Eady – give a different picture. There, the impression is given of a gold-digger luring a rather naive celebrity into a brief relationship which she then sought to exploit, both by selling her story to the press and by extracting money from CTB himself. As Mr Justice Eady put it

It now seems that the Claimant may well have been “set up” so that photographs could be taken of Ms Thomas going to one or other, or both, of the hotels.

and

The evidence before the court at that point, therefore, appeared strongly to suggest that the Claimant was being blackmailed

If those accusations are true, then it does put an entirely different light on the matter. I think a lot of people would agree that people, even celebrities, should have the right to prevent the press printing an essentially contrived story about them. But also, if the accusations are true then CTB has been the victim of a serious crime. If that is the case, then that needs to be investigated properly by the police and anyone found to be involved needs to be brought to justice. But, on the other hand, if that isn’t an accurate account of what happened then CTB and his lawyers, aided and abetted by the judge, have perpetrated a very serious libel against Miss Thomas. At least, it would be libel if it were not for the fact that statements made in court are subject to absolute privilege.

This is where my sympathy for CTB wears thin. Irrespective of any other considerations, it seems to me to be an abuse of process to use the court as a vehicle for defaming someone else while at the same time making it impossible for her to defend herself in public. Wanting to prevent the gutter press printing her story, if indeed it is largely fictional, is reasonable. But it isn’t reasonable to combine that with hindering the investigation of a possible crime and exploiting a legal loophole to avoid a libel suit.

What makes it all the more ironic is that CTB seems to be blissfully unaware of the Streisand Effect. The attempts to hush it up have only served to propel both the affair itself, and speculation over his identity, further into the public mind. As many celebrities have found, coming clean and getting it over with almost always works out better in the long run – does anyone really care now about Wayne Rooney’s well-publicised dalliances with a prostitute last year?

I’m not expecting top-class footballers to be morally perfect. They are very rich, often not particularly intelligent – it doesn’t take brains to be a footballer, fortunately for some – and are an obvious target for those who would seek to exploit them. But someone, somewhere along the line, should have sat down with CTB and told him that using the courts to try to hide his infidelity was just plain stupid.

The reason for this is that Visa is one of the main Olympic sponsors, and has done a deal to exclude other card handlers from anything related to the Olympics.

In my opinion, this is unfair, unreasonable and entirely unjustifiable. It has also been condemned by Which? Magazine as well as many other media and sporting bodies.

There’s nothing wrong with commercial sponsorship of sporting events whereby the sponsor gets exposure of their brand in return for the organiser getting money. But sponsors should not be able to dictate what the fans can and cannot do. Whether it’s the credit card you use, the clothes you wear or the food you eat, the sponsors have no moral right to override your choice.

I’ve never tried to create a Facebook campaign before, but this seems to be to be a subject that’s ripe for one. So I’ve created a page for the campaign, and this blog post is effectively its launch. What I’m asking people to sign up to is a simple pledge:

During the period of the London Olympics, 27 July – 12 Aug 2012, we will not use our Visa cards. For those two weeks, all our spending will be carried out by other means. Mastercard, Amex, good old fashioned cash – it really doesn’t matter. It may be a bit inconvenient, in some cases it may even cost us more, but we’re going to do it

I have no idea how popular this will be. It might go viral and take off. It might bomb. Even if the campaign gets a lot of attention, I have no idea at all how effective it’s likely to be in affecting Visa. But the worst that can happen is that it has no effect at all. My immediate target is to get the campaign passing around the Twitterati and getting noticed by the media. After that, we’ll see where it goes.
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If the civil libertarians, the conspiracy theorists and the Conservatives had their way, Abdul Azad would probably never have been caught. Azad was convicted of a brutal stranger rape in Stafford in July 2005 after fragments of his skin were recovered from under his victim’s fingernails and yielded a DNA profile matching his record on the national database.

About This Site

The official (and sometimes unofficial) site of Mark Goodge. Internet geek. Politics nerd. Local councillor and political (in)activist. Believer in free speech, free enterprise and free data. All opinions are personal.